JGBs gain on Turkey political deadlock; investors eye June industrial production, July trade balance data

Japanese government bonds gained during Asian session Monday as falls in the Turkish lira spurred demand for safe-haven assets, following a political deadlock in the country. Investors will now focus on the country’s industrial production for the month of June and trade balance data for July, scheduled to be released later in the week for added direction in the debt market.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1/2 basis point to 0.100 percent, the yield on the long-term 30-year note fell 1 basis point to 0.837 percent and the yield on short-term 2-year traded tad lower at -0.115 percent by 05:15GMT.

The Turkish lira found another botton on Monday as concerns over a political clash with the United States worsened and investors are worried about the policymakers’ inability to tackle the raging problems within the economy.

Turkish president Erdogan warned of "economic warfare" as US president Trump hiked the metal tariffs on the country, and the lira briefly bottoming out after the banking regulator limited swap transactions, OCBC Treasury Research reported.

Meanwhile, the Nikkei 225 index plummeted 1.66 percent to 21,929.00 by 05:30 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bullish at 155.75 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex